Name: Balancing The Ledger: How IBM Is Using Blockchain, Facebook's Privacy Battle, and How Blockchain Will Change the Way You Shop
Uploaded: 2019-12-06
Duration: 10 min 6 s
Description: Bridget van Kralingen, IBM’s SVP of Global Industries, Platforms, and Blockchain, joins The Ledger team on this week's episode.

[MUSIC PLAYING] Welcome to Balancing the Ledger where finance and tech intersect. I'm Jen Wieczner. I'm Robert Hackett. And today, we're joined by Bridget van Kralingen, who leads all of IBM's many blockchain initiatives. Thank you so much for being here, Bridget. Such a pleasure to be here with you. So I wanted to start off by talking about some of the news this week from the parent company of the New York Stock Exchange, the Intercontinental Exchange, or ICE, saying that they are thinking about launching a platform for trading virtual currency like Bitcoin. You've worked with financial institutions, so I'm curious, what are you hearing and seeing from them? What is going on here? Many, many companies and clients are starting to think seriously about implementing blockchain, because it has so many potential capabilities-- one being the fundamental underlying technology is Iran a distributed ledger, which means many, many processes can flow faster and more quickly and more transparently by using blockchain. Blockchain can be a utility and provide a utility for all sorts of digital tokens and digital currencies to be traded. So I think that this is something that companies will be exploring. And what they need to think about is how to make the technology safe, secure, permissioned, and scalable. And I know those are considerations they will be thinking about. We're actually seeing some established companies jump into the Bitcoin space. We've seen Goldman Sachs. So they are now going to actually start up a trading desk that is exclusively focused on that. Where do you fall on in that regard. Are you interested in digital currencies, some sort of cryptocurrencies out there like Bitcoin? So we are really a technology company there to support our clients and our clients' business success. So our interest in blockchain really is around supporting the technology and the business models versus being a financial institution. That's not what IBM's mantra is about. That being said, as I've talked about, one piece of this is understanding the distributed ledger technology. But another piece really is that tokens will be able to convey all sorts of value. And the fact that whether it's Bitcoin or other digital currencies, they will be traded, there will be a market, and these will be utilities that will be traded and tokenized. And so we believe that it's important to be able to support many, many different types of tokens for different markets. Just a quick example, very far from Goldman Sachs, but one of our clients, the Plastic Bank, is trying to figure out how to make plastic valuable. By 2050, there'll be more volume of plastic in the sea than there are fish. And if you could make plastic a valuable commodity, you could get a lot more of it collected. And so what their idea is plastic to be collected and traded. And we built a blockchain for that to occur. So I see a world where lots of market exchanges and lots of types of tokens will evolve. And we're very, very early days yet. And you've also seen some of the big names in business and finance this week, such as Bill Gates and Gary Cohn, saying that they're not fans of Bitcoin but they really do believe in this underlying blockchain technology. And you also had Facebook, which is a huge tech company, saying they are starting a team to explore a blockchain. What do you think the strategy or the opportunity is there in front of them for a company like Facebook? So I think for Facebook, the fundamental issue that they're grappling with is very suited to the technology of blockchain. So what they are grappling with is securing data and making sure that if people want privacy or trackability of their data, they can actually secure that. Whether it's on the ad side or the personal side, they have both an opportunity and a business reason to think about those issues. And inherently, what blockchain does is it actually makes sure that if you share data, it's permissioned. What you want to share, you permission to share. And what you want to keep private, you can. So it can do that for them. It can also track what happens to people's data. So I think it's a technology that fits very well with some of the business model challenges that they're actually facing. And I think they're very right to take this very seriously. And IBM is now exploring blocking for a number of different use cases, not just data security. But you guys have 1,500 people working on this. Tell us a little bit about the initiatives that you're developing. So, we stood up our blockchain unit, as I was talking to both a little bit earlier, at the end of 2016. We had a skunkworks in research because we thought the power of distributed ledger technology was so powerful to make the world's processes work more efficiently. So we stood up the unit. And we really went very, very quickly by leaning into the technology for enterprise, because we recognized whilst there's a lot of hype around digital currency, there's great enterprise use cases for the use of blockchain. So we did really, I would say, three things. We invested heavily in the technology, making it useful for both developers, small developers, small companies, but also big enterprise. We made it secure, permissioned, scalable, and very easy to build. And so we made it kind of robust, the way IBM knows how to do, to build it so that it works for a company. The second thing, we know from seeing technology evolve many times and introducing many new technologies into the world that it needs to be open and owned by communities. So we've heavily heavily supported an open source approach to the technology. So we worked with the Linux Foundation and founded a project called Hyperledger, which is the fabric for that that blockchain is built on. And we donated many, many millions of lines of code around, 5 million to this day, and continue to do so and together with 200 other organizations have built a fabric which makes blockchain and open technology that the developers of the world can contribute to but also govern and control. That's very important because it makes-- if we're saying, blockchain needs to be transparent and accountable, the process, so does the technology. And so we stand very strongly behind open technology, second thing we did. And then the third thing is we looked at the world and said, where would the most potential be? And what we thought was it was around supply chain and around payments. So we've done a lot of work with many clients around the world and founding blockchains around cross-border payments, which have got massive positive implications, but also around supply chain, things like food safety, things like digitizing the shipping supply chain with massive business benefits. Which clients really get it, would you say? Which are kind of the shining stars and examples of taking this technology forward? Yes. So one of our shining stars I think just in terms of the attributes of blockchain about efficiency but also being good for the world is Walmart and a group of consumer packaged goods companies and retailers, such as Unilever, Nestle, Dole, Kroger, who are supporting the Food Trust a blockchain that we've built. And this has been going on for about a year and a half. It's proven, it's working. And the focus of this blockchain is to take a very unwieldy, kludgy food safety and food recall components, which today best in class Walmart takes six days and 18 hours to recall a food, and reduces it to two seconds. And so we've already loaded hundreds of SKUs, hundreds and thousands of transactions. And the idea is this becomes a digital approach to food safety that can allow instant recall. And the significance of that is 30% of the world's food is wasted today, about 420,000 people die from food poisoning. So if you can fix that, it's massive for the world. So I'd say that group is a clear leader. What other ways do you see for it to change our daily lives? How is this going to look in the future? So some really here are now examples last week, we announced a blockchain for jewelry. And so Richline, Habsburg. Richline is the manufacturer. Habsburg is a retailer. And for the first time you can put diamond rings end-to-end on a blockchain. So not just the diamond or the metal, but you can figure out, does the diamond conform with the Kimberley ad, are there any conflict metals involved? And you can buy a diamond ring that you know has been mined and produced in a sustainable, ethical way. And that's really significant, because 73% of millennials will pay more for something that is actually sustainably and ethically sourced. So that's one way it will change your life. And with Marsh and McLennan, also a week ago we announced a blockchain where corporates and small businesses and individuals can put all their insurance documentation on a blockchain. So instead of scrambling around if you were a small contractor every time to repeat your documents to prove that you have insurance and you can legitimately work, it's on a blockchain anyone can tap into. And quite frankly, I think that the final one I would pull out which I'm so excited about is-- I don't think these networks are just for the big guys. So we are working with a microfinance organization in Kenya where we have loans for small street traders on a blockchain and to their mobile phones so we can see credit behavior and do real time credit ratings and give them loans. And they get more loans by better behavior, by better credit behavior, which was impossible for them to demonstrate before because they couldn't go into banks and fill in forms. So suddenly we have a community there that can leverage capital and show good commercial behavior in a very, very small business environment. So I have this view that many, many business networks between individuals will start up in the world. And you know, we are in very early days in blockchain. But I can see a world where many, many networks thrive. Well, I think that's all we have time for. Thank you so much for being here, Bridget. Jen and Robert, it's a pleasure talking to you about something that we are collectively so excited about. I'm Jen Wieczner. I'm Robert Hackett. Come to fortune.com for more "Balancing the Ledger." We will see you next time. [MUSIC PLAYING] 

Balancing The Ledger: How IBM Is Using Blockchain, Facebook's Privacy Battle, and How Blockchain Will Change the Way You Shop

Finance

Bridget van Kralingen, IBM’s SVP of Global Industries, Platforms, and Blockchain, joins The Ledger team on this week's episode.

welcome to balancing the ledger where finance and tech intersect. I'm Jen Vietnam. I'm Robert Hawkins. And today we're joined by Brigitte Van Crawl in Jin, who leaves all of IBM many Blockchain initiative. Thank you so much for being here, Bridget. That's a pleasure to be here with you. So I want to start off by talking about some of the news this week from the parent company of the New York Stock Exchange Intercontinental exchange, or ICE thing, that they are thinking about launching a platform for trading virtual currencies like Bitcoin. You've worked with financial institutions. I'm curious. What are you hearing and seeing from them what is going on here? Many, many companies inclined. I'm starting to think seriously about implementing Blockchain because it has so many potential capabilities. One being the fundamental underlying technology is around a distributed legend, which means many, many processes conclude faster and more quickly and more transparently. By using Blockchain, Blockchain can be a utility and provide a utility for all sorts of digital tokens and digital currencies to be traded. So I think that this is something that companies will be exploring and what they need to think about is how to make the technology say, secure, commissioned and scalable. And I know there's a consideration that will be thinking about We're actually seeing some established companies jump into the Bitcoin space. We've seen Goldman Sachs that they're now going to actually start up a trading death that is exclusively focused on that. Where do you fall on in that regard? Are you interested in digital currencies? Cryptocurrencies out there like that coin, right? So we're we're really a technology company there to support our clients and our client's business success. So our interest in Blockchain really is around supporting the technology in the business models. This is being a financial institution that know what IBM Montrose about that being said, as as I've talked about, one piece of this is understanding that distributed ledger technology. But another piece, really, is that tokens we'll be able to convey also value and the fact that whether it's Bitcoin or other digital currencies, they will be traded. There will be a market, and these will be utilities that will be traded and token eyes. And so we believe that it's important to be able to support many, many different types of tokens for different markets. Just a quick example very far from Goldman Sachs. But one of our clients, the plastic bank, is trying to figure out how to make plastic valuable about 2050. There'll be more volume of plastic in the sea than there are fish, and if you could make plastic a valuable commodity, you could get a lot more of it collected. And so what? Their idea is this book requested to be collected and traded, and we built a Blockchain for that to occur. So I see a world where lots of market exchanges and lots of types of tokens will evolve. And we have very, very early days yet, and you've also seen some of the big names in business and finance this week. Just Bill Gates and Jerry Kun think that they're not fans of Bitcoin, but they really do believe in this underlying Blockchain technology. And you also have Facebook, which is a huge tech companies, saying they are starting a team to explore Blockchain. What do you think? The strategy, The opportunity is there in front of them up for a company like Facebook. So I think for Facebook, the fundamental issue that they're grappling with is very suited to the technology off Blockchain. So what? They're grappling with securing data and making sure that if people want privacy or track ability of the data, um, they can actually secure that. Whether it's on the ad side of the personal side, they have both an opportunity and a business reason to think about those issues and inherently what Blockchain does. Is it actually make sure that if you share data, it's permission? What, you what you want to share you permission to share which one to keep private you can that can do that for them. It can also crack what happens to people data. So I think it's a technology that fits very well with some of the business model challenges that they're actually facing. And I think they're very right to take this very seriously. And IBM is now exploring blocking for a number of different use cases, not just data security, but you have 1500 people working on this. Tell us a little bit about the initiatives that you're helping. So we we stood up our Blockchain unit talking to birth a little bit earlier at the end of 2016. We had a skunk works in research because we thought the power off distribute alleged technology was so powerful to make the world processes work more efficiently. So we stood stood up the unit and we really went very, very quickly by leaning into the technology for enterprise because we recognize you know what? There's a lot of hype around digital currency. There's great enterprise use cases for the use of Blockchain. So we did. Really, I would say three things. We invested heavily in the technology, making it useful for both developers, small developers, small companies but also big enterprises. We made it secure, permission scalable and very easy to build Andi. So we made it kind of world, but the way I didn't know how to do to build it so that it works for a company. The second thing we know from seeing technology evolved many times and introducing many technologies into the world that it needs to be open and owned by community. So we heavily heavily supported an open source approach to the technology. So we worked with the linen foundation and founded a project called Hype Religion, which is the fabric for that that Blockchain is built on and we done it. Donated many, many millions of lines of code around five million to this day and continue to do so and together with 200 other organizations, have built a fabric which makes Blockchain and open technology that the developers of the world can contribute to but also government control. That's very important because it makes it was saying, block Chinese to be transparent and accountable. The process, so does the technology. And so we stand very strongly behind us in technology. Second thing we did and then the third thing is way We looked at the world, said Where would the most potential be on what we thought was? It was around supply chain and around payments. So we've done a lot of work with many clients around the world world and founding block chains around cross border payments which have got massive positive implications but also Ron supply chain things like food safety, things like digitizing the shipping supply chain with message benefit which clients really get it, would you say, which are kind of the shining stars and examples of taking this technology forward? Yes, so so one of our shining stars, I think, in terms of the attributes of Blockchain about efficiency. But also being good for the world is Walmart and a group of consumer packaged goods companies and retailers. Such a union even s play doll Kroger, who are supporting the trust of chairman We've built, and this is being going on for about a year and hot proven. It's working. And the focus of the Blockchain is to take the very unwieldy clue GY, food safety and food recall components, which today best in class. WalMart takes six days in 18 hours to recall the food, and it reduces it to two seconds. And so we've already loaded hundreds off. Kay used hundreds and thousands of transactions, and the idea is that becomes a digital approach to food safety that can allow instant recall on the significance. Of that is, 30% of the world's food is rested. Today, about 420,000 people die from food poisoning, so you can fix that its massive for the world. So I'd say that group is a clear leader. What other ways do you see for it to change our daily lives? How is it going to look in the future? So So I'm really here and now. Examples are last week we announced a a Blockchain for jewelry and so rich line Health Burt, which lines the manufacturer health. Berg is a retailer, and for the first time, you can put diamond rings into end on a block change not just the diamond or the metal, but you could figure out, Does the diamond conform with the Kimberley Act? Are there any conflict metals involved? And you can buy a domineering that, you know, has bean mind and produced in a sustainable lexical way. And that's really significant because 73% of millennials will pay more for something that is actually sustainably and ethically sourced. So that's one way we'll change. Change your life with Marsh McLennan or so. A week ago, we announced a Blockchain where corporate can put there, and small businesses and individuals can put all the insurance documentation on the block chain instead of scrabbling around of your small contract every time to repeat your documents to prove that you have insurance and you can legitimately working on a Blockchain anyone contest into. And quite frankly, I think the the final one I will would cool out, which I'm so excited about it. I don't think these next weeks just for the big guys. So we are working with the micro finance organization in Kenya, where we have loans for small street traders on a Blockchain and the mobile phone so we can see credit behavior and do real time credit ratings and give them loans. And they get more loans by better behavior about been acquitted behavior, which was impossible for them to demonstrate before because they can't go into banks and filling out forms. Suddenly, we have a community there that can leverage capital on dhe, show you no good commercial behavior in a very small business environment. So I have this view that many, many business networks between individuals will start up in the world. And, you know, we're very early days in Blockchain, but I could see a world with many, many networks. Dr. Well, I think that's all we have time for. Thank you so much for being here, Bridget General, but it's a pleasure talking to you about something collectively so excited about I'm Jen, Vietnam. I'm Robert Hackett. Come to fortune dot com for more balancing the ledger. We'll see next time